Weekly market barometer

At the end of each week, I take a close look at the market and objectly evaluate the numbers.

By Jim Van Meerten Dec 18, 2009 7:04PM
It's time again for me to step back, objectively see what the market accomplished in the last week and plan my investing strategy for the coming week. I use BarChart for my data and the Value Line Index as my market barometer. I like this index because it uses 1,700 stocks instead of the narrower S&P 500 or the very narrow Dow 30.

 

Value Line Index rose 1.06% for the week and is up 4.56% month to date, a small but respectable gain.

  • The index closed above its 20-, 50- and 100- day moving averages
  • BarChart short-term rating -- 80%
  • BarChart mid-term rating -- 100%
  • BarChart long-term rating -- 67%
  • Overall rating -- 88%, 11 buys and 2 holds
  • Index closed at 2,207.56, almost back to its year to date high of 2239.69

BarChart market momentum (which covers about 6,000 stocks) -- I follow the percentage of stocks closing above their Daily Moving Averages for various time periods. 50% closed above the DMA for all thress time frames.

  • 20 DMA -- 61.96% closed above
  • 50 DMA -- 62.56% closed above
  • 100 DMA -- 69.01 closed above

Ratio of stocks hitting new highs to stocks hitting new lows for various periods -- 1.0+ bullish, 1.0 neutral, under .99 bearish -- all 3 periods above 1.0

  • 20 day new high/new low ratio -- 955/791 = 1.21
  • 65 day new high/new low ratio -- 438/291 = 1.51
  • 100 day new high/new low ratio -- 384/192 = 2.00

Summary -- The market didn't set the world on fire, but I'd take the gains it made this week any day. A few bumps but up in the end. Next week I'll trim any stock falling below its 50 DMA and not be afraid to recommit the funds to replace it.

 

I do expect a little bumpiness between now and the end of the year as investors close out some positions to realize tax losses they might have in individual stocks. Because there will be downward pressure during this tax-loss recognition period, I don't expect the market to explode or call for any short sale covering. As always January is a month you should prepare to be fully invested.

 

Wall Street Survivor results -- Remember that all the contributors to Top Stocks that make stock recommendations place those recommendations into model portfolios over on Wall Street Survivor so you can track the results of the recommendations. By the S&P 500 the market was down .88% for the month to date, and 7 of our 8 contributors beat that benchmark. John Reese came in 1st with a 4.5% MTD return and I came in 7th with a .46% return. Not much, but I did beat the benchmark.

 

Disclosure: I have no positions in any of the stocks held in my Wall Street Survivor portfolio.

 

Jim Van Meerten is an investor who writes about financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com

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